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The Japanese Yen traded broadly higher as Asia Pacific bourses followed Wall Street downward, offering a lift to the perennially anti-risk currency. The Australian Dollar fell following disappointing GDP data. The New Zealand Dollar rose however, tracking front-end Treasury bond futures higher to hint that a cooler Fed rate hike outlook may have burnished the currency’s appeal as a yield-seeking alternative.

Another quiet day on the European data docket seems likely to put sentiment trends back in the spotlight. Futures tracking the FTSE 100 and S&P 500 equity benchmarks are pointing convincingly lower before London and New York come online, spelling trouble for risk-geared commodity bloc currencies and hinting at further gains for the Yen.

With that in mind, risk appetite has been fickle over the past two days. A positive lead in stock index futures that argued for risk-on dynamics proved to be misleading in back-to-back sessions, with investors’ mood souring mid-session. It is unclear whether the same pattern is likely to hold when preliminary indications point to a risk-off bias, but traders would be wise to tread carefully.

As ever, politics remain a wildcard. UK Brexit Secretary David Davis is due to address a parliamentary committee and Prime Minister Theresa May faces question time in the House of Commons. Both will surely have to opine on the almost-there EU/UK accord that fell apart early this week. Headlines out of Washington DC also bear watching as the Mueller investigation closes in on President Donald Trump’s inner circle.

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